AGREEMENT AND ARTICLES OF MERGER
AGREEMENT AND ARTICLES OF MERGER, dated this 20th day of September,
1993, by and between FPA Capital Fund, Inc., a Maryland corporation
(hereinafter called the "Maryland Corporation" or the "Surviving
Corporation") and FPA Capital Fund, Inc., a Delaware corporation (hereinafter
called the "Delaware Corporation"), said corporations sometimes collectively
called the "Constituent Corporations".
WHEREAS, the Maryland Corporation is a corporation duly organized and
validly existing under the laws of the State of Maryland, has authorized
capital stock consisting of 100,000,000 common shares, having a par value of
$0.01 per share, and owns no interest in land in the State of Maryland; and
WHEREAS, the Maryland Corporation is a wholly-owned subsidiary of the
Delaware Corporation; and
WHEREAS, the Delaware Corporation is a corporation duly organized and
validly existing under the laws of the State of Delaware, has authorized
capital stock consisting of 50,000,000 common shares, having a par value of
$1.00 per share, and owns no interest in land in the State of Maryland; and
WHEREAS, the principal office of the Maryland Corporation in the State
of Maryland is c/o CT Corporation System, 00 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000. Its principal place of business is 00000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000; and
WHEREAS, the principal office of the Delaware Corporation in the State
of Delaware is c/o The Corporation Trust Company, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000. Its principal place of business is 00000 Xxxx
Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000; and
WHEREAS, the Board of Directors of each of the Constituent Corporations
has adopted this Agreement and Articles of Merger as a Plan of Reorganization
intended to qualify as such under Section 368(a)(1) of the Internal Revenue
Code of 1986, as amended (the "Code"), and the Constituent Corporations and
their respective Boards of Directors deem it advisable and to the advantage
of the Constituent Corporations and their respective stockholders that the
Delaware Corporation be merged with and into the Maryland Corporation, with
the Maryland Corporation being the Surviving Corporation, under and pursuant
to the laws of the state of Delaware and the State of Maryland on the terms
and conditions herein contained.
NOW, THEREFORE, in consideration of the premises and mutual agreements,
covenants and provisions herein contained, the parties hereto agree to the
terms and conditions of the foregoing merger and the mode of carrying the
same into effect as follows:
ARTICLE I
1.1 The Delaware Corporation and the Maryland Corporation agree that at
the Effective Time of the merger, as defined in Section 1.2 below, the
Delaware Corporation shall be merged with and into the Maryland Corporation,
and the Maryland Corporation shall be the Surviving Corporation and shall be
governed by the laws of the State of Maryland.
1.2 The merger shall become effective at the time and date that the
later of the following two events has occurred: (i) the filing of this
Agreement and Articles of Merger (the "Agreement") with the State Department
of Assessments and Taxation for the State of Maryland in accordance with the
provisions of Section 3-113 of the Maryland General Corporation Law, and (ii)
the acceptance of this Agreement for filing by the Secretary of the State of
Delaware in accordance with Section 252 of the Delaware General Corporation
Law. The date and time when the merger shall become effective are referred to
herein as the "Effective Time".
1.3 The Articles of Incorporation of the Maryland Corporation in effect
immediately prior to the Effective Time shall continue to be the the Articles
of Incorporation of the Surviving Corporation, until amended in the manner
provided in the By-Laws and in the Maryland General Corporation Law.
1.4 The By-Laws of the Maryland Corporation in effect immediately prior
to the Effective Time of the merger shall continue to be the By-Laws of the
Surviving Corporation, until amended in the manner provided in the By-Laws
and in the Maryland General Corporation Law.
1.5 The persons who constitute the Board of Directors of the Maryland
Corporation immediately prior to the Effective Time shall constitute the
Board of Directors of the Surviving Corporation and shall hold office until
the next annual meeting of stockholders of the Surviving Corporation or until
their respective successors are elected and qualified, provided that they are
elected by the stockholders of the Delaware Corporation at the 1993 Annual
Meeting of Stockholders of the Delaware Corporation (the "1993 Annual
Meeting").
1.6 The persons who serve as the officers of the Maryland Corporation
immediately prior to the Effective Time shall be the officers of the
Surviving Corporation until the next annual meeting of directors of the
Surviving Corporation or until their respective successors are elected and
qualified.
1.7 Ernst & Young, the independent accountants of the Delaware
Corporation immediately prior to the Effective Time, shall serve as
independent accountants to the Surviving Corporation to report upon the
financial condition of the Surviving Corporation for the fiscal year ending
March 31, 1994, provided the appointment of Ernst & Young is approved by
stockholders of the Delaware Corporation at the 1993 Annual Meeting.
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ARTICLE II
2.1 The manner and basis of converting the issued and outstanding
shares of the common stock of the Delaware Corporation into the shares of the
Surviving Corporation shall be as hereinafter set forth in this Article II.
2.2 Each share or fraction thereof of common stock of the Maryland
Corporation issued and outstanding immediately prior to the Effective Time
shall, as of the Effective Time, forthwith cease to exist and be canceled.
2.3 Each share or fraction thereof of common stock of the Delaware
Corporation issued and outstanding immediately prior to the Effective Time
shall thereupon be converted, without any action on the part of the holder
thereof, into an equal number of whole and fractional shares of common stock
of the Surviving Corporation. Each certificate representing shares of the
Delaware Corporation shall represent the same number of shares of the
Surviving Corporation subject to the right of each holder of a stock
certificate representing shares of the Delaware Corporation to surrender the
same to the Surviving Corporation and to receive in exchange therefor a
certificate representing an equal number of shares of common stock of the
Surviving Corporation. Each such share of common stock of the Surviving
Corporation issued pursuant to this paragraph shall be fully paid and
non-assessable.
2.4 Any transfer taxes payable upon issuance of shares of common stock
of the Surviving Corporation in a name other than that of the registered
holder of the shares of the Delaware Corporation entitled to receive the same
shall be paid by the person to whom such shares are to be issued.
ARTICLE III
3.1 At the Effective Time, the separate existence of the Delaware
Corporation shall cease, except to the extent, if any, continued by statute,
and all the assets, rights, privileges, powers and franchises of the Delaware
Corporation and all debts due on whatever account to it, shall be taken and
deemed to be transferred to and vested in the Surviving Corporation without
further act or deed; and all such assets, rights, privileges, powers and
franchises, and all and every other interest of the Delaware Corporation
shall be thereafter effectually the property of the Surviving Corporation as
they were of the Delaware Corporation; and the title to and interest in any
real estate vested by deed, lease or otherwise, unto either of the
Constituent Corporations, shall not revert or be in any way impaired. The
Surviving Corporation shall be responsible for all of the liabilities and
obligations of the Delaware Corporation, but the liabilities of the
Constituent Corporations or of their stockholders, directors, or officers,
shall not be affected by this merger, nor shall the rights of the creditors
thereof or any persons dealing with such corporation or any liens upon the
property of such corporations, be impaired by this merger, and any such claim
existing or action or proceeding pending by or against either Constituent
Corporation may be prosecuted to judgment as if this merger had not taken
place, or the Surviving Corporation may be proceeded against or substituted in
place of the Delaware Corporation. Except as otherwise specifically set forth
in this Agreement, the identity, existence, purposes, powers, franchise,
rights, immunities and liabilities of the Maryland Corporation shall continue
unaffected and unimpaired by the merger.
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3.2 All corporate accounts, plans, policies, resolutions, approvals,
and authorizations of stockholders, Board of Directors, Committees of the
Board of Directors, and agents of the Delaware Corporation that are in effect
immediately prior to the Effective Time shall be taken for all purposes as
the acts, plans, policies, resolutions, approvals and authorizations of the
Surviving Corporation and shall be as effective and binding thereon as the
same were with respect to the Delaware Corporation.
3.3 In case at any time after the Effective Time the Surviving
Corporation shall determine that any further conveyance, assignment or other
documents or any further action is necessary or desirable to vest in or
confirm to the Surviving Corporation full title to all cash and securities
and other properties, assets, rights, privileges and franchises of the
Constituent Corporations, the officers and directors of the Constituent
Corporations, at the expense of the Surviving Corporation, shall execute and
deliver all such instruments and take all such action as the Surviving
Corporation may determine to be necessary or desirable in order to vest in
and confirm to the Surviving Corporation title to and possession of all such
cash and securities and other properties, assets, rights, privileges and
franchises and otherwise to carry out the purpose of this Agreement.
3.4 The Surviving Corporation hereby (1) agrees that it may be served
with process in the State of Delaware in any proceeding for the enforcement
of any obligation of the Delaware Corporation, as well as for the enforcement
of any obligation of the Surviving Corporation arising from the merger herein
provided, including any suit or proceeding to enforce the right, if any, of
any stockholder as determined in appraisal proceedings pursuant to the
provisions of Section 262 of the General Corporation Law of the State of
Delaware, (2) irrevocably appoints the Secretary of State of the State of
Delaware as its agent to accept service of process in any such suit or other
proceedings, and (3) specifies the following as the address to which a copy
of such process shall be mailed by the Secretary of State of Delaware: FPA
Capital Fund, Inc., 00000 Xxxx Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000, Attention: Corporate Secretary.
ARTICLE IV
4.1 Each of the Constituent Corporations represents and warrants to and
agrees with the other that:
(a) Such Corporation is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and is, or
will be, duly qualified as a foreign corporation in the State of California.
(b) Such Corporation has full power and authority to carry on its
business as it is presently being conducted and to enter into the merger
contemplated hereby.
(c) There is no suit, action or legal or administrative
proceeding pending or to its knowledge threatened, against it which, if
adversely determined, might materially and adversely affect its financial
condition or the conduct of its business.
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(d) At the Effective Time, consummation of the transactions
contemplated hereby will not result in the breach of, or constitute a
default under, any agreement or instrument by which it is bound.
(e) All of its presently outstanding shares, if any, are
validly issued, fully paid and non-assessable.
(f) Immediately prior to the Effective Time, such Corporation
will have good, marketable and unencumbered title to its cash, securities
and other assets.
ARTICLE V
5.1 The obligations of each of the Constituent Corporations to
effectuate the merger hereunder shall be subject to the following conditions:
(a) The representations and warranties of each Constituent
Corporation contained herein shall be true as of and at the Effective
Time with the same effect as though made as of and at such date, and each
Constituent Corporation shall have performed all obligations required by
this Agreement to be performed by it prior to the Effective Time; and
each Constituent Corporation shall have delivered to the other a
certificate dated as of the Effective Time signed by its Chairman,
President or Vice President and by its Secretary or Treasurer to the
foregoing effect.
(b) Each Constituent Corporation shall have delivered to the
other a certified copy of the resolutions of its Board of Directors
approving this Agreement, which resolutions shall be adopted by at least
a majority vote of its directors, including a majority of its directors
who are not "interested persons" of the Delaware Corporation as that
term is defined in the Investment Company Act of 1940 (the "1940 Act").
(c) The Securities and Exchange Commission ("SEC") shall not
have issued an unfavorable advisory report under Section 25(b) of the
1940 Act nor instituted any proceeding seeking to enjoin consummation of
the merger under Section 25(c) of the 1940 Act.
(d) No legal, administrative or other proceedings shall have
been instituted or threatened between the date of this Agreement and the
Effective Time seeking to restrain or otherwise prohibit the merger.
(e) The holders of at least a majority of the outstanding
shares of common stock of the Delaware Corporation shall have voted in
favor of the adoption of this Agreement and the merger contemplated
hereby at the annual meeting of stockholders, and the holders of the
outstanding shares of the Maryland Corporation shall have approved the
adoption of this Agreement and the merger contemplated hereby by written
consent or at an annual or special meeting of stockholders.
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(f) Each Constituent Corporation shall have received an opinion of
counsel, from O'Melveny & Xxxxx, substantially to the effect that:
(1) The merger of the Delaware Corporation into the Maryland
Corporation will qualify as a reorganization within the meaning of Section
368(a)(1) of the Code and each Constituent Corporation will be a party to
the reorganization within the meaning of Section 368(b) of the Code;
(2) No gain or loss will be recognized to the Delaware
Corporation upon the transfer of its assets to, and assumption of its
liabilities by, the Maryland Corporation;
(3) The basis of the assets of the Delaware Corporation
received by the Maryland Corporation will be the same as the basis of such
assets in the hands of the Delaware Corporation immediately prior to the
merger;
(4) The holding period of the assets of the Delaware
Corporation received by the Maryland Corporation will include the period
during which such assets were held by the Delaware Corporation;
(5) No gain or loss will be recognized by the Maryland
Corporation upon its receipt of the assets of the Delaware Corporation;
(6) No gain or loss will be recognized by the stockholders of
the Delaware Corporation upon their receipt of common stock of the
Surviving Corporation as a consequence of the merger;
(7) The basis of the shares of common stock of the Surviving
Corporation received by stockholders of the Delaware Corporation will be
the same as the basis of the shares of the Delaware Corporation surrendered
by such stockholders;
(8) The holding period of the shares of common stock of the
Surviving Corporation received by stockholders of the Delaware Corporation
will include the holding period of such shares of common stock of the
Delaware Corporation as are surrendered by such stockholders provided that
such shares of the Delaware Corporation were held as a capital asset at the
Effective Time; and
(9) The accumulated earnings and profits of the Delaware
Corporation will become earnings and profits of the Maryland Corporation
available for the subsequent distribution of dividends within the meaning
of Section 316 of the Code.
(g) Each Constituent Corporation shall have received an opinion (or
opinions) of counsel in form and substance satisfactory to it to the effect
that:
(1) the corporate existence, good standing and authorized
common stock of each Constituent Corporation are as stated or referred to
in this Agreement;
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(2) the shares of common stock of the Surviving Corporation to
be issued pursuant to the terms of this Agreement have been duly authorized
and, when issued and delivered as provided herein, will have been validly
issued, fully paid and non-assessable;
(3) all corporate proceedings required to be taken by or on
the part of each Constituent Corporation to authorize and carry out this
Agreement and to effect the merger contemplated hereby have been duly and
properly taken; and
(4) this Agreement is the legal, valid and binding obligation
of each Constituent Corporation enforceable against it in accordance with
its terms.
ARTICLE VI
6.1 The Maryland Corporation agrees that this Agreement shall be
submitted to its stockholders for approval by unanimous written consent on or
before October 19, 1993, or on such other date as its Board of Directors
shall approve.
6.2 The Delaware Corporation agrees that this Agreement shall be
submitted to its stockholders for approval at a meeting duly called and held
on October 19, 1993, or on such other date as its Board of Directors shall
approve. If this Agreement is adopted by the affirmative vote of at least a
majority of the outstanding shares of common stock of the Delaware
Corporation at such meeting and by the stockholders of the Maryland
Corporation pursuant to Section 6.1, then this Agreement, properly executed
and acknowledged and accompanied by such other certificates or documents as
may be required by law, shall (if not terminated or abandoned pursuant to
Article VII hereof) be filed and recorded as provided under the laws of
Delaware and Maryland.
6.3 If the merger contemplated hereby is consummated and made
effective, all expenses incurred by either of the Constituent Corporations in
connection with this Agreement shall be paid by the Surviving Corporation. If
such merger is not consummated, each of the Constituent Corporations shall
bear such expenses as have been separately incurred by it. Neither of the
Constituent Corporations shall pay the expenses, if any, of its stockholders
arising out of the merger.
ARTICLE VII
7.1 Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated and the merger abandoned at
any time (whether before or after adoption hereof by the stockholders of the
Delaware Corporation) prior to the Effective Time:
(a) by mutual consent of the Constituent Corporations;
(b) by either of the Constituent Corporations if any condition set
forth in Article V hereof has not been fulfilled or waived by it; or
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(c) by either of the Constituent Corporations if the merger shall
not have become effective on or before December 31, 1993.
7.2 An election by a Constituent Corporation to terminate this
Agreement and abandon the merger shall, be exercised by its Board of Directors.
7.3 In the event of termination of this Agreement pursuant to the
provisions hereof, the same shall without any liability on the part of either
of the Constituent Corporations or persons who are its directors, officers,
or stockholders in respect of this Agreement, become void and have no effect,
provided that this provision shall not protect any director or officer of
either of the Constituent Corporations against any liability to such
corporation or its stockholders to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their office.
7.4 At any time prior to the Effective Time, any of the terms or
conditions of this Agreement may be waived by the Constituent Corporation
entitled to the benefit thereof by action by its Board of Directors or its
President, if, in the judgment of the Board of Directors or President taking
such action, such waiver will not have a material adverse effect on the
benefits intended under this Agreement to the stockholders of the Constituent
Corporation on behalf of which such action is taken.
ARTICLE VIII
8.1 The respective representations and warranties of the Constituent
Corporations contained in Article IV hereof shall expire with, and be
terminated by, the merger contemplated by this Agreement, and neither the
respective Constituent Corporations nor any of their directors or officers
shall be under any liability with respect to any such representations or
warranties after the Effective Time. This provision shall not protect any
director or officer of either of the Constituent Corporations against any
liability to such corporation or to its stockholders to which they would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
their office.
ARTICLE IX
9.1 This Agreement embodies the entire agreement between the parties,
and there are no agreements, understandings, restrictions or warranties
among the parties other than those set forth herein or herein provided for.
9.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original but all of such counterparts
together shall constitute but one instrument.
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IN WITNESS WHEREOF, each of the Constituent Corporations has caused this
Agreement and Articles of Merger to be executed on its behalf by its
President or Vice President and attested to by its Secretary or Assistant
Secretary all as of the day and year first written above.
FPA CAPITAL FUND, INC.
a Delaware corporation
(Corporate Seal)
By/s/ Xxxxxx X. Xxxxxxxxx
----------------------------
Xxxxxx X. Xxxxxxxxx, President
Attest:
By/s/ Xxxxxx Xxxxxx
-----------------------------
Xxxxxx Xxxxxx, Secretary
FPA CAPITAL FUND, INC.
a Maryland corporation
(Corporate Seal)
By/s/ Xxxxxx X. Xxxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxxx, President
Attest:
By/s/ Xxxxxx Xxxxxx
-----------------------------
Xxxxxx Xxxxxx, Secretary